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Are You Clued Up On Financial Scams?

There’s nothing as valuable in this digital age than your identity, but what if someone steals it? You might think your ID, account and phone numbers are of no use to others, but this not true.

Fraudsters are capable of wreaking havoc with these crucial bits of personal information and can ruin your credit record, impersonate people, open accounts and apply for loans. These illegal activities cost the global economy billions of Rands each year.

They are fraudsters; they do this for a living. They spend hours figuring out how to deceive people, bypass fraud checks and steal money – and they’re very good at it. Rudolf Mahoney, Head of Brand and Communications at WesBank, says you might already be aware of the risks of card skimming and ATM scams, which involve direct interaction, but credit and vehicle finance sees fraudsters taking different approaches. These can include:

  1. Identity theft – This involves a criminal using your identity, through stolen personal details, for the purposes of committing fraud. Through social engineering they are able convince the credit providers to grant them loans, issue credit cards and, in extreme cases, even credit for cars or houses – all in your name. To the financial institutions the transaction appear to be legitimate, as they have all required information on file, but you’d be held liable for the debt in your name – a situation that would be disastrous for your credit record. You’d have to notify all the credit providers and cancel these loans, as credit bureaus have no mechanisms to automatically determine which loans are fraudulent.
  2. Instalment take-over schemes – During times of financial difficulty, especially with rising living costs and interest rates hikes placing pressure on budgets, you might resort to unconventional means to free up cash. However, you need to steer clear of all instalment take-over schemes. Accredited financial institutions do not offer these; car finance contracts are between the buyer and the bank, and no third party. You should be wary of any service that offers to pay your monthly instalment in return for taking possession of your financed car.
  3. Phishing – Along with providing the means to bring you innovative new products and solutions, the Internet and mobiles have also opened up a number of avenues for deceitful people to commit crime, especially fraud. This can be through e-mails or text messages, with scammers offering financial products or providing false payment information. Or it can take the form of phishing: a falsified communication from a credit provider, with lookalike websites designed solely for the purpose of capturing personal information. Not only can this leave bank accounts exposed, but it also gives more personal information to criminals.

Source: WesBank

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